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FCC and DOJ Investigating Texas School Districts

The FCC Office of Inspector General (OIG) released its Semi-Annual Report to Congress in which they highlight their audit activities from March 31, 2010 to September 30, 2010. The OIG reported an ongoing investigation into possible fraud throughout school districts in Texas involving E-rate internal connections equipment.

In the July and August time frame, the FCC and DOJ coordinated their resources and spent two weeks traveling to school districts to “determine the existence, location and use of [E-rate] equipment.” The OIG did not mention a time frame for completion of the investigation.

E-rate regulations require that applicants maintain an asset inventory for five years from the date of purchase that clearly shows the location of the equipment and when it is transferred (if applicable). Funds For Learning’s E-rate Manager for Applicants is a resource to help schools track and monitor their E-rate commitments and has various tools, such as an asset tracker, to help school districts stay in compliance with the many requirements.

Other items of note within the OIG report are as follows:

  • In FY2008 Congress granted the OIG authority to use $21.4 million from the Universal Service Fund to provide more resources and based on those additional funds, the OIG hired 15 professional staff for a four year period to help with that oversight.
  • USAC is required to go through annual audits themselves to determine if internal controls to prevent waste, fraud and abuse are sound. PricewaterhouseCoopers (PwC) conducted the audit and the FCC and USAC are working toward correcting any deficiencies found.
  • PwC was also involved in auditing the USAC Schools and Libraries Committee to confirm that the Committee is meeting their responsibilities. The USAC Schools and Libraries Committee is responsible for such actions as projecting demand for the support mechanism, administering the application process, and performing audits of support beneficiaries. The audit did not result in significant findings.
  • While OIG beneficiary audits will continue, in FY2011 the OIG will continue to focus on providing programmatic oversight to USAC
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